I believe a fundamental problem the videogame industry has run into is how funding is obtained. To get money for projects, the investors want to see that what they are investing in has a track record. This means they keep throwing money at things that have sold in the past. By doing this, they end up creating red oceans that work against their long-term interests. They also look to put things in boxes that fit. Well, the entertainment industry has an aspect that is KEY to it working... that is novelty. You want to get people entertained, you better do it by providing something new that captivates. Unfortunately, you aren't going to get investors who will put the money up for it.
The end result of all this? The innovation comes in on the lower end, with lower production values, because the risks are seen as too high. And you get an excess of me-to mentality.
I personally run into this a bunch, when I try to get some money to help with a non-profit I am working on that is promoting classic games, like chess, and other modern abstract strategy games. Because I am unable to show real financials, it ends up being a futile effort to get money and help to show anything. Oh, I do get progress, working on the margins, that costs next to nothing. Because there is no track record, financially, sp there is no funding. No funding means it can't get the track record. However, the moment someone does something like Nintendo did with the Wii... BLAMMO you have a whole bunch of vultures swooping in, thinking they can do the same, but add a feature or two, and they have success. Well, they don't get the sales they expect. Rather than try to find real untapped needs, and playing to that, they do me to.... just make it more expensive and it is sure to sell.
Two examples of how this works: Puzzle Quest and Tower Defense. They end up surprise hits, so people think that, with tower defense, you can grab a big name license and slap it on a tower defense game, and BLAMMO it is a lock for a win. And then the Puzzle RPG gets its own glut, because people think that all you need to do is just somehow combine the two? Why weren't the me to's done before? Well, the investors and management of companies wouldn't back these ideas.
